Solar Energy : A Goldmine For Indian Entrepreneurship

 

Introduction :

In an era of advancing technology and growing environmental consciousness, the quest for sustainable and renewable sources of energy has become paramount. Among the diverse array of options, solar power stands out as a shining beacon of hope. The harnessing of the sun's immense energy potential has not only revolutionized the way we generate electricity but also holds the key to mitigating climate change and building a cleaner, greener future.

Why India Wants Solar Energy :

India has been dependent on the Middle East for oil for over 70 years. Consequently, whenever there is chaos in the world, oil prices spike, and we bear the brunt of inflation. For instance, in 1973, when Saudi Arabia expressed its displeasure towards Israel, they abruptly raised oil prices from $20 to $60 per barrel. This caused shockwaves of inflation throughout India. Combined with our 1971 war with Pakistan, it severely impacted India's economy.

 Similarly, we recently witnessed how the Russia-Ukraine war led to oil price hikes, directly resulting in inflation in India and globally. Even in minor incidents, such as when Joe Biden, the President of the USA, made a statement against Saudi Arabia, MBS (Mohammed bin Salman) became annoyed and immediately reduced oil production by 2 percent. As a result, we observed inflation in India and the rest of the world. These random conflicts, in which India is not even involved, slowed down the Indian economy. That's why India has been diligently working to decrease its energy dependence on the Middle East, and one of the crucial steps taken is the formation of the International Solar Alliance (ISA).

Graph 1 : Oil prices hikes during geopolitical events B/W 1970 - 2023.

Why World Needs Solar Energy :

In recent years, the world has witnessed a remarkable shift towards solar energy as a primary source of power. This transition is driven by a multitude of compelling reasons that go beyond environmental concerns. From economic advantages to energy security and technological advancements, the global movement towards solar energy is transforming the way we generate and consume electricity.

Either It’s United Nations Climate Action Summit 2019 or COP25 (Conference of the Parties to the United Nations Framework Convention on Climate Change) December 2019, or COP26 (Conference of the Parties to the United Nations Framework Convention on Climate Change) November 2021.

In all these conferences, all countries' major concern and focus is towards playing a significant role in shaping the agenda for global climate action. It aimed to mobilize political and economic commitments to accelerate the transition to a zero-carbon future. Discussions included strategies to shift away from coal and petroleum towards renewable energy sources and zero carbon emissions. The focus was on accelerating action to limit global warming to 1.5 degrees Celsius and achieve net-zero carbon emissions by mid-century. Many countries made commitments during this conference to transition away from coal and petroleum.

The United Kingdom aims to reach net-zero emissions by 2050, with an interim target of reducing emissions by 78% by 2035. Germany has a similar target, aiming for net-zero emissions by 2050. France has set a goal of achieving carbon neutrality by 2050 as well. Sweden aims to be carbon neutral by 2045, while Denmark has set a more ambitious goal of achieving net-zero emissions by 2040. China, the world's largest emitter of greenhouse gases, has announced its intention to become carbon neutral by 2060. The United States, under the Biden administration, has committed to achieving a carbon-free power sector by 2035 and net-zero emissions economy-wide by 2050. These countries, among others, are taking significant steps to combat climate change by setting targets to eliminate or offset their carbon emissions in the coming decades.

To reach their goals, all countries need to shift their energy dependence from oil and coal to renewable energy sources like solar, wind, hydro, and geothermal energy. Among these options, solar energy is the most reliable, cost-efficient, and abundant. The falling cost and abundance of solar energy make it a favorable choice.

How Solar Could Be A Gamechanger :

In the current time period, the demand for renewable energy sources needs to meet 176,000 TWh of energy demand. However, as of now, we only have 34,000 terawatt hours of capacity. Therefore, the demand for solar, wind, and other renewable sources is going to shoot up in the next twenty years.

Graph 2 : Primary Energy Consumption Worldwide

With each passing decade, the cost of renewable energy has been decreasing. The cost of solar energy has dropped by 82% from $378 to just $68 per megawatt hour over the past three decades. Similarly, the cost of wind energy has decreased by 38% from $86 to $53. The same trend can be observed with other renewable energy sources.

Amongst these sources, solar energy is expected to dominate the renewable energy sector. This is due to its falling cost, scalability, and versatility. Solar energy can be utilized in a wide range of applications, from rooftop installations to large-scale solar farms. Its scalability allows for economical deployment with flexibility, enabling it to meet diverse energy requirements. Furthermore, India benefits from an abundance of solar energy.

In contrast, wind energy requires a minimum wind speed of 40 to 50 kilometers per hour to generate a significant amount of energy. Similarly, hydro energy necessitates a high flow of water. However, solar energy simply requires consistent exposure to sunlight. This simplicity is a significant factor contributing to economists' anticipation that solar energy will become the dominant source of renewable energy.

India’s Edge Over Other Countries In Solar Sector :

India is situated in the Torrid zone, as it lies between the Tropic of Cancer and the Tropic of Capricorn. This geographical positioning grants India three significant advantages over countries outside the Torrid zone.

Firstly, the Torrid zone receives abundant sunlight throughout the year. On average, India experiences 300 sunny days annually, making it an ideal region for solar energy.

Secondly, the angle of incidence of sunlight near the equator is nearly 90 degrees to the Earth's surface. This angle gradually decreases as we move towards the poles on both sides. Therefore, the area between the tropics benefits from a more direct angle of incidence, resulting in more intense sunlight. This increased intensity translates into higher energy yields on solar panels.

Thirdly, India enjoys a cost advantage. When considering the cost of solar energy versus coal, it is essential to factor in other significant costs such as storage, depreciation, and maintenance. The cost of solar panels can be evaluated over their entire lifetime. In terms of Levelized Cost Of Energy (LOCE), solar energy in India ranges from 6-8 cents per unit, compared to non-Torrid zone countries like the EU or Russia, where it is 28 cents per unit.

What Is ISA :

ISA stands for the International Solar Alliance. It is an international organization that aims to promote solar energy deployment and facilitate cooperation among countries in achieving their renewable energy goals. The ISA was jointly launched by India and France during the United Nations Climate Change Conference in Paris in 2015.

The primary objective of the ISA is to address the challenges related to the widespread adoption of solar energy in member countries, particularly in areas where solar resources are abundant. The alliance aims to mobilize resources and facilitate the development of solar projects, technologies, and capacity building initiatives.

The ISA encourages cooperation among member countries in areas such as policy and regulatory frameworks, sharing of best practices, research and development, and investment in solar energy projects. It also focuses on promoting solar applications for various sectors including agriculture, healthcare, and rural electrification.

The ISA membership is open to all United Nations member countries lying fully or partially between the Tropics of Cancer and Capricorn. As of now, the ISA has garnered support from over 120 countries, including many solar-rich nations.

Through its collaborative efforts, the ISA seeks to accelerate the transition towards sustainable, low-carbon energy systems and contribute to global efforts in mitigating climate change.

India As Leader In ISA :

As mentioned earlier in this blog, India has spearheaded the creation of the International Solar Alliance (ISA) in collaboration with France, along with 91 other countries as members of this alliance.

India, as a leader in the ISA, has introduced an initiative called the One Sun One World One Grid Initiative (OSOWOG). This initiative aims to power the entire world with solar electricity through a unified electric grid. Its objective is to develop a global grid that enables the transmission of clean energy to any location, to be used at any time.

The first phase of this initiative focuses on connecting the Indian grid with those of the Middle East, South Asia, and Southeast Asia. The second phase will expand the connectivity to Africa, and in the third phase, it will encompass the rest of the world, incorporating as many countries as possible. The ultimate goal is to create an extensive, interconnected power grid solely based on renewable energy, which will be accessible to all nations.

To realize this global solar grid, countries will require sufficient financing for investment and the establishment of solar plants. ISA itself will provide significant insurance coverage in this regard. Additionally, apart from infrastructure, the development of human resources through capacity building is crucial. For this purpose, ISA has introduced the Star C program, which offers training in technical skills and entrepreneurship to member countries through dedicated hubs called Star Centers. By 2030, 50 Star Centers will be established worldwide, catering to the needs of engineers, technicians, government officials, and industry associations, facilitating the acquisition of skills necessary to work with solar energy.

How ISA Initiative Can Benefit Indian Enterpreneurs :

Firstly, India is providing financing to the ISA. By the year 2025, the Indian government has pledged a massive sum of $2 billion for international concessional financing solely dedicated to solar power. Additionally, the Indian Import-Export Bank is extending lines of credit with lower interest rates to partner nations. However, in exchange for this financing, the projects must primarily engage Indian companies and predominantly use Indian goods and services, such as solar batteries and panels. This presents a significant opportunity for Indian solar companies to tap into the global solar wave.

Secondly, the Indian government has been supporting the ISA by providing training to master trainers in the field of solar energy through the Indian Technical and Economic Cooperation (ITEC) scheme. This initiative aims to enhance expertise and knowledge in the sector.

Finally, the Indian government is actively promoting numerous solar ventures to achieve its net-zero carbon emission goal by 2070. This focus on solar energy presents abundant opportunities for Indian entrepreneurs. One such opportunity lies in the rooftop solar category, which empowers individuals and businesses to generate power closer to their homes and offices. This approach reduces energy costs and provides backup during power outages. Indian companies have already demonstrated their expertise in this field, and many are expanding to other countries. For future entrepreneurs, this sector offers vast prospects to build businesses in India and worldwide. However, it's crucial to note that many existing entrepreneurs in this field are unaware of the benefits offered by the Indian government. This blog, along with the ISA website, aims to help them access these benefits and support future entrepreneurs in the solar energy sector.